Metrovacesa will Invest €400M to Build a New 550-Home Neighbourhood in Palma

30 November 2018 – Eje Prime

Metrovacesa is going to expand the city of Palma. The listed property developer is going to construct a new neighbourhood comprising 550 homes in the Balearic capital with an investment that will exceed €400 million. The company is going to build five developments in the Nou Llevant area, which is expected to be completed in 2023.

The real estate company has already started marketing the first phase of the project with Jardins del Llevant, a development comprising 91 multi-family homes with between one and four bedrooms and eleven duplex homes with four bedrooms.

Construction of the complex will begin during the second quarter of 2019 to be ready by the end of the following year. In the common areas, the enclosure will have gardens and two panoramic, outdoor swimming pools on the roof.

Through this commitment to Palma, Metrovacesa is going to develop more than 160,000 m2 of land, of which 110,000 m2 will be for tertiary use and the remaining 56,000 m2 will be for residential use.

Currently, the property developer owns a portfolio of land for the development of 38,000 homes across the country. The company is going to put sixty developments and 5,000 new units on the market next year, as Eje Prime reported. Metrovacesa expects to close the year “with double-digit growth”, according to explanations provided recently by Juan Núñez, Operations Director at the real estate firm. The objective of the company for 2019 is to be the number one property developer in Spain and to reach an annual turnover of €1 billion in 2020.

Original story: Eje Prime

Translation: Carmel Drake

Balearic Government Approves Construction of 500 New Homes in Palma’s Son Ferragut Urbanisation

17 October 2018 – Última Hora

On Wednesday, the Balearic Government will approve the construction of the urbanisation of Son Ferragut and will allow the development of 550 homes, as well as the opening of Salvador Hedilla park and of all the local roads. The urbanisation project was approved in 2002, but the economic crisis resulted in the suspension of the construction work in 2007 and it was not resumed again until 2014. During that time, there were some changes in ownership: the site went from being owned by Son Dameto Ibercor into the hands of Sa Nostra and is now owned by Sareb (the bad bank).

The Councillor for Town Planning, José Hila, explained that after the approval by the Government, the property developers will be notified about the agreement; next, the reception certificate will be signed and Cort will be able to take charge of the maintenance of the roads and amenities. Nevertheless, the councillor said that the maintenance of the green space will be performed by the conservation entity that is going to be constituted for that purpose, until 50% of the planned buildings have been constructed. Hila believes that the bad bank will have no problems selling this land and highlights the importance of increasing the stock of housing in Palma by 500 units. Nevertheless, he clarified that none of the homes will be public because the legislation did not require that in 2002.

The Son Ferragut plot spans 110,000 m2, of which 31,000 m2 may be used for new homes, with a buildability of 78,000 m2. The forecast is for 500 homes to be built, with one area for multi-family homes, comprising a ground floor and four above-ground storeys, and another area for single-family homes; a maximum of 1,646 people will be able to live on the site. The remaining 79,000 m2 will be decided into several plots, which may house different facilities: one for education (a plot has been ceded to the Government for a school), one for sport (there is a sports centre, which will be opened once the services are provided) and a free public green space spanning 10,000 m2.

Original story: Última Hora (by A. Mateos)

Translation: Carmel Drake

Spain’s Most Expensive Property in Palma de Mallorca is up for Sale

7 September 2018 – Majorca Daily Bulletin

Villa Solitaire in Son Vida, Palma is said to be the most expensive property in Spain. It is on the market with the John Taylor real estate agency for €65 million.

The villa was designed by the Italian Matteo Thun. It has outstanding views over Palma Bay. At €65 million, it is a lot more expensive than two other properties in Mallorca that have been highlighted previously because of their high prices – a mansion in Bonaire, Alcudia and a country estate with a house in Puigpunyent. Villa Solitaire beats the former by some €30 million.

There are seven bedrooms in the property, which occupies a surface area of 2,300 square metres. Six bathrooms, a rooftop terrace with open-air cinema, gymnasium, parking for six cars, a botanical garden, a lift; these are just some of the other features. The interior is designed in harmony with the Mediterranean environment and the exterior’s natural spaces. Everything is of the highest possible quality. At €65 million euros, that should be taken as a given.

Original story: Majorca Daily Bulletin

Translation: Carmel Drake

Ghost Homes: 200 Buyers Lose €3M in Mallorca’s Biggest Real Estate Scam

30 August 2018 – The Local

Scores of budding homeowners on Spain’s biggest Balearic island have been defrauded out of their life savings after putting forward money for apartments that were never built or never existed.

On paper, real estate group Mallorca Investments offered clients the chance to buy apartments through local developer Lujo Casa for a price below the market average.

Budding homeowners would then give an advance of at least 10 per cent of the property price to the developer in order to supposedly tie down one of the apartments before it was built.

The new proprietors would even check that the plans were presented at city councils on the island, which would often instigate a request for a higher percentage from the developer, El País reported.

Some people put forward as much as €200,000 to own a luxury home in a coastal neighbourhood of Palma, Mallorca’s capital.

However, as time passed, construction work on the commissioned apartment buildings never seemed to get off the ground.

When the buyers demanded explanations from developer Lujo Casa, whose offices were shared with Mallorca Investments, no proper explanation was given.

“When we went months later to ask for explanations, the real estate agency had changed address and there were no employees from the building company either,” one of the buyers who put down first €23,500 euros and then €70,500 euros when the plans were presented at a town hall, told the Spanish daily.

“When we managed to contact them the real estate agency would ignore us or tell us they had no new information and that they had also been cheated.

“Nobody at the developer’s answered our e-mails either”.

This nonchalant and evasive reaction was part of the modus operandi of the property group, which according to Spanish Civil Guard sources could be behind the biggest real estate scam in the history of Spain’s Balearic Islands.

Following numerous official complaints from 50 of the disgruntled buyers – young, old, local and foreign – a covert investigation was carried out by Spanish authorities which led them to understand how the estate agency and the developer were operating together and how they were run by the same businessman.

A quick check online confirmed that the suspected scammer, an Italian man, was continuously sharing pictures on his social media accounts of his ostentatious jetsetter lifestyle, travelling business class to Dubai, popping bottles of the most expensive champagne and driving lavish sports cars through Mallorca.

The man, called M.P. by Spain’s Civil Guard, has been arrested and is awaiting trial for numerous counts of fraud.

But for the 200 people who put money forward for the ‘ghost homes’, many of whom sacrificed their life savings, there is little indication as to whether they’ll ever see their money or their properties materialize.

Original story: The Local

Edited by: Carmel Drake

 

Ibiza’s Real Estate Market is a “World of its Own”

11 July 2018 – Diario de Ibiza

The real estate market in Ibiza is not encouraging (for the majority): the available stock of homes “is residual”, the majority of homes bought there are rented out, the peak prices reached in 2017 have been exceeded…and all of this is being compounded by a distinct shortage of land. All in all, it is a troubling scenario for those wishing to live on the island all year round.

Tinsa’s Regional Director for the East and South of Spain, José Antonio López, warned on Wednesday that the lack of land, combined with the demand for housing “is generating a dangerous melting pot” in the Balearic Islands. As such, he is asking the administration to get involved to facilitate the availability of land for property developers.

Those were the words used by López in response to a question from participants at a Proinba-Tinsa real estate meeting held in Palma on Wednesday, where the situation of the residential real estate market was discussed, in particular, the market on the coast.

López warned that this situation may “lead to serious problems” on the islands, where “young people need primary residences” and they “need options”. “For this reason, land is required, and the administration needs to get involved”, said Tinsa’s Regional Director, before adding that the supply of urban land with building permission is “almost non-existent”.

What’s more, “the supply is going to decrease” and with the “surplus demand”, we are seeing “dangerous growth that cannot be met”. In this context, “rental is not an option because those circumstances are also being taken advantage of”. In fact, according to data from Tinsa, in areas such as Ibiza (town), many people are buying to let (…).

Based on data from Tinsa, the average monthly mortgage payment on the Balearic Islands is very high, €792, well above the average for Spain as a whole, €543/month. The financial effort being made by families on the islands is also greater, given that they spent 22% of their household income on mortgages during the first year, compared with the national average of 16.8%.

Ibiza and Formentera set a new record

Of the 12 coastal municipalities analysed on the Balearic Islands, Sóller leads the increase in prices over the last year, with price rises of 21%. Ibiza and Formentera towns came in close behind, with 17.8%, followed by Santa Margalida (17.7%), Palma (14.7%) and Llucmajor (13.8%).

Palma is one of the top five most expensive capitals in Spain, with an average price of €1,951/m2, and in the last year, its growing trend has exceeded the average for the autonomous region.

By contrast, the municipalities that have grown by the least are Sant Lluís and Mahón (3.7%), Ciutadella (4.5%) and Manacor (7.1%) (…).

Ibiza is “recovering too quickly”

According to data from Tinsa, the real estate sector on the coast in Mallorca is “clearly recovering”, whilst in Menorca, there are “signs of recovery” and in the case of Ibiza, there may even be an “excessive recovery”, in López’s opinion.

Prices have been “rising rapidly” on the white island, on a consistent basis for the last few years, and the YoY variation is well above the average. In fact, current prices have already exceeded the maximums seen in 2007.

On the basis of all of these indicators, the Regional Director at Tinsa said that Ibiza’s real estate market could be considered “a world of its own, set apart from other islands and provinces” (…).

Original story: Diario de Ibiza (by E.P.)

Translation: Carmel Drake

Gestilar Launches Plan to Address Mallorca’s Scarce Housing Supply

6 July 2018 – Eje Prime

Gestilar is thinking about the Mediterranean. The property developer has started the summer by marketing the first 89 homes that it is building in Mallorca. As part of its €123 million investment plan, the real estate company is going to build 400 homes over the next few years in Palma across three developments in the Nou Llevant area, to the south-east of the city.

Mediterrània 1, the residential development through which the real estate firm has arrived in the Balearic Islands, is going to comprise homes with two, three and four bedrooms. It is designed for locals, both first-time buyers as well as those looking to reposition”, explain sources at Gestilar speaking to Eje Prime.

On an island with a “shortage of structural supply and economic stability”, Mallorca has become “one of the most desirable markets in Europe for investing in the real estate sector”, according to Raúl Guerrero, Director of Developments at Gestilar.

At the end of 2017, the property developer led by Javier García-Valcárcel purchased three plots in the Balearic capital with a total surface area of 55,300 m2. “We set our sights on Palma due to the shortage of new housing projects that have been built there in recent years”, explains Guerrero, who highlights the “the pent-up and unfulfilled demand” that exists in the city.

The first of the developments comprises several four- and seven-story blocks with their ground floors allocated to commercial premises. The design of the project has been entrusted to the Spanish architecture studio L35, which has created an urbanisation with substantial common areas.

Located 500 metres from the beach and the port of Portixol, Mediterrània 1 will have communal spaces with a swimming pool, a gym and a games area for children. The construction of the first phase is due to start between the last quarter of this year and the first quarter of 2019, with the aim of handing over the first keys before the end of 2020.

“There is space for new projects in Palma” 

Gestilar’s interest Palma is not the first from a Spanish residential property developer in recent months. A few days ago, the listed company Aedas Homes put on the market its fourth project in the Balearic capital and several other companies are working to begin projects this year.

This growing interest in Mallorca comes in response to the sales rates on the island that place it at the top of the ranking in the residential sector, behind Madrid and Barcelona. “It is still too early to assess the rates of our own developments, but for the last few months, we have been monitoring and updating our market research, and the results of this analysis reveal a high rate of marketing in the area”, explains Guerrero (…). According to the director of Gestilar, “there is space for new projects in Palma”, where the property developer has already opened an office.

In this regard, the property developer believes that Palma is going to be one of the cities, like Madrid, Barcelona and Bilbao, that will look to improve its positioning abroad. In the Balearic capital, we are seeing a recovery in terms of property development activity, where a significant number of developments have started to be marketed between December 2015 and October 2017, which means that home completions are now growing, according to Gestilar (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Balearic Government Doubles its Tourist Eco-Tax from 1 May 2018

3 May 2018 – Expansión

Tourists enjoying their holidays on the Balearic Islands awoke on Tuesday to news that isn’t going to completely ruin their fun, but which is certainly going to affect their wallets. The tax that tourists have to pay for each overnight stay on the islands, also known as the eco-tax, had doubled overnight. That was the result of the entry into force of the new tariffs for the Balearic Island Government’s Sustainable Tourism Tax. The increase has been criticised by hoteliers on the islands, which regard it “as frankly wrong, given that any kind of extraordinary tax reduces our competitiveness”, explains María José Aguiló, Executive Vice-President of the Hotel Business Federation of Mallorca (FEHM) in statements to this newspaper.

The government team led by Francina Armengol (PSOE) announced that this new tariff would enter into force from 1 May onwards. Specifically, during the high season, which runs from 1 May until 31 October, any tourist staying in a hotel ranked 4-stars or above will have to pay an eco-tax of €4 per night, which is twice as much as they had to pay during the same period last year (€2) and €3 more than the amount charged during the low season – from 1 November until 30 April.

One of the risks related to the rise is that, with the recovery of other markets in the Mediterranean Arc, such as Egypt and Turkey, the increase in the final cost of each stay will cause tourists to flee to other more competitive destinations.

Although the news is not new – the rise was announced in September last year – it has still surprised many tourists and critics alike, including hoteliers. By mid-morning yesterday, one tourist staying in a hotel in Palma had refused to pay the tax, claiming that he had not been informed about the doubling of the tariff and expressing his doubts over the use that would be made of the funds raised. Although the problem did not go any further – the hotel decided to bear the cost of the tax on this occasion – the situation clearly raises an important issue, relating to the information that is being offered.

Sources close to the Vice-President of the Balearic Government explain that communication efforts have been carried out in the media, as well as through tour operators and trade associations. Nevertheless, hoteliers are asking for a greater push. “Some customers book their trips directly and are unaware of the news”, explains Aguiló, who said that “more specific material” needs to be provided to inform people.

On the other hand, “customers are asking us what this money is being used for”, added Aguiló, which may lead to a reluctance to pay it. For now, they propose that the Government intensifies its communication effort in source markets.

Armengol’s Government expects to raise around €120 million this year through this tax, which will also be applied to tourists who arrive on cruise ships, regardless of how long they stay for – previously, it was only applied to visitors who stayed for more than 12 hours -. The aim, explain Government sources is “to offset tourist pressure and to conserve the eco-system and heritage, so that we can all still enjoy the islands in 10 years time” (…).

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

Merlin to Invest €16M Remodelling Porto Pi Shopping Centre (Palma)

15 December 2017 – Última Hora

Merlin Properties, the listed real estate investment company (Socimi) and largest shareholder of the Porto Pi shopping centre, is going to invest €16 million to remodel and improve the asset’s commercial offer.

The Socimi, in which Santander and BBVA hold a stake, has set itself the objective of improving the centre to bring it into line with current tastes in the market.

Sources at Merlin Properties indicate that in the new era of shopping centres, the aim is to attract the greatest number of visitors “for convenience and experiences”.

The Socimi plans to extend the centre’s areas of activity beyond pure shopping, towards experiences. Moreover, it is keen to integrate the centre with e-commerce, through the constitution of a marketplace and by placing Amazon and Correos e-commerce purchase collection points, as well as pop-up stores and temporary outlets.

Merlin Properties estimates that these improvements, together with the management and natural growth of the assets, will allow it to increase its current annual revenues by 22% and to exceed a country-wide turnover figure of €500 million based on all of its planned projects, without having to buy new properties.

Amongst the most important investments are the €21 million that it plans to spend on the complete renovation of the Larios centre in Málaga and the €16 million that it plans to spend on Porto Pi in Palma.

The shopping centre in Palma receives 8.7 million visitors per year. The different phases of the construction work that are going to be carried out will be completed during the first quarter of 2020 (…).

The final objective is to consolidate Porto Pi’s dominant position at the commercial level in Palma with the maximum variety and diversification of products.

Original story: Última Hora (by J. L. Ruiz Collado)

Translation: Carmel Drake

Mitula: Rental Prices Soar In Spain’s Large Cities

25 January 2017 – El Mundo

The residential rental market is riding high at the moment and this good situation is reflected in rental prices, which are soaring in most of Spain’s major cities, according to a study by the home finder Mitula. Specifically, rental prices have increased by more than 60% in Barcelona over the last five years, whilst in Madrid, they have risen by almost 20% during the same period.

In this way, average rental prices in the Spanish capital amounted to around €1,048 per month in 2012, a figure that has grown in a sustained way over the last five years. By January 2017, the average rent in Madrid stood at €1,256, which represents an increase of 19.85%.

Other cities such as Barcelona and Palma have also seen their residential rental prices soar, but to an even greater extent. In the case of the Catalan capital, for example, the average rent has risen from €892 in January 2012 to €1,478 in January 2017, which represents an increase of 65.70%.

Palma has also seen its rental prices move upwards. A rental home in the capital of the Balearic Islands used to cost around €700 per month on average in 2012. Nowadays, the same property costs around €1,000 (€986), up by 40%, according to Mitula.

This upwards trend is being repeated in most of Spain’s major capitals, but there is one exception: Santander. The capital of Cantabria is one of the few cities where rental prices have remained practically frozen. At the moment, a rental home costs €649 per month, on average, which is 2.84% less than five years ago, when the figure stood at around €668/per month.

Original story: El Mundo

Translation: Carmel Drake